Essay On Power Sector In Nigeria

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POWER SECTOR 2.1. General Sector Overview Nigeria is considered as one of the energy rich country in the world. Nigeria is rated among the top Oil Producer in Africa, second in natural gas reserve (with an estimate of 176trillion cubic feet) and estimated 2 billion metric tons of coal. Nigeria is also rich in water, wind and sun energy from which appreciable electricity can be generated. With the abundance of energy resources, Nigeria need not import energy to achieve a sustainable generating capacity suffices the targeted economic growth and also has excess generation to sell to neighboring countries. Nigeria’s electric power sector up on till 2013 had been dominated by a State-controlled monopoly which had over the years under performed. This impacted the economy negatively as the shortfall in electricity generation is covered by privately owned generator sets. These are powered by gas, diesel or petrol. This development has necessitated private sector involvement in the sector and has lead to the privatization of the sector. Regulatory framework was changed in 2005 when the Power Sector Reform Act was signed into law. This was followed by the unbundling of PHCN by the government into eleven distribution companies (Discos), six generating companies (Gencos), and a transmission company. The Nigerian Electric Regulatory Commission (NERC), an independent regulatory agency, is now responsible for the regulation and monitoring of the country’s power sector. It was set up to issue appropriate licenses to market participants (players in the Nigerian electricity market). Power generation, transmission and distribution infrastructure, remain significantly inadequate. Electricity in Nigeria is provided mainly from two sources: Thermal ... ... middle of paper ... ...d. Funds are provided through Austrian and foreign commercial banks. Commercial banks apply for OeKB refinancing on behalf of their clients and funds are disbursed in form of export credits to the respective exporters. The funds are provided exclusively up to the amount covered by the respective liability. Maximum maturity of the credit is a function of the maturity of the underlying liability. In the case of delivery transactions the maximum repayment periods are governed by the rules of the OECD Arrangement depending on the country category of the recipient country. Refinancing may be provided for maturities of up to 10 years. Repayment usually starts no later than six months after the starting point of credit (e.g. the date of shipment or acceptance of the goods) and is made no less frequently than every six months in equal installments. 2.11. Outlook and Trends

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